Utah Valley Economic Outlook

September 9, 2013

Knowing that BYU does not participate actively in research parks and venture funds and other kinds of economic development that other universities do, it is incumbent upon the cities to take advantage of this opportunity and be the low-hanging fruit.

HUNT: There’s also a strong manufacturing base that probably doesn’t get the attention that it deserves. There’s a lot of companies that are in the manufacturing field, and the high-tech manufacturing field, that are doing extremely well and coming out with some innovative products.

We just expanded Liberty Safe again. They’re taking almost 300,000 square feet of space here in the valley. That’s something that a lot of people don’t know about because they just quietly do their thing. There are four significant safe manufacturers right here in our valley. We’re probably producing 80 percent of the safes made in the U.S. right here.

Our industrial square footage is almost as tight as it was pre-recession. We’re down to 6.1 percent vacancy. That makes my job more difficult because I don’t have the space. It’s interesting to see the switch that has flipped in the last 12 to 18 months as that slowly has grown.

What are our greatest economic strengths, our greatest weak-nesses, and where can we improve?

SCOTT: Dixon mentioned the low unemployment rate. There’s so much entrepreneurialism in this valley that when people graduate from college, they start their own business. They’ve got fantastic ideas, and so they don’t jump into the workforce, they just start their own thing. It’s kind of a strength and a weakness at the same time, as far as established companies that are looking for talent.

RICHARDS: The most acute problem I see is software engineering—the ability to find a coder is abysmal, and it really impedes the projects of companies and forces them to move.

With the cluster in Lehi forming, they’ll move up there. Hopefully they’ll get closer to concentration. Then companies like Adobe and others snag the coders and pay them six-figure salaries, which emerging companies can’t really afford. For startup companies, looking for a software engineer is the hardest, most challenging problem. Every day I get 10 to 20 requests of how to find a software engineer. And I say, “I wish I knew.”

HOLMES: That, in itself, has created these code academies. I know of three, and there’s probably four, who will all be starting within the next 30 to 60 days. It may not be at the level that Adobe and others are looking for, but it’s getting closer. And that provides an opportunity, at least for UVU and maybe others, to get into that market to start producing what we need here locally so they can fill both at the startups and for the more established businesses.

PESCI: We were one of the first companies to go in some of those buildings in Lehi, and we watched that exploding all around us. Then last year we were purchased by a publicly traded company in Georgia, and it’s interesting to see how they assessed us; they came here to see not just our company, but the valley. People are generally surprised by how talented our technology groups are here—by the great work ethic, by unusual linguistic skills. They’ve made a nice commitment to staying here and to growing here.

For us, our greatest challenge is the same issue that we hear. It’s supply of technology people. It’s a big challenge to be able to get the developers that you need when you’re looking to grow right now.

Competition for qualified workers has led to more competitive wages. Is that good or bad for business?

RICHARDS: I went to Chicago to tour these code academies, and at first I didn’t think that Utah companies would hire people out of a three-month vocational training program for software engineering. But I came back and straw-polled about 10 Utah Valley companies—like MoneyDesktop, DropShip, Domo—and the average starting salary they paid people out of the program was $80,000.

Adobe is paying software engineers $120,000-plus; and if they are an important project and are looking to leave to a smaller company, they’re getting $160 to $180,000. The emerging technology companies can’t compete with that.

MOYES: We work with 70 to 75 companies along the Wasatch Front and consult on benefits packages. One of the trends we’re seeing, particularly in technology companies, is to be able to attract and retain these talented individuals, they’re having to offer more competitive retirement plans, a more diverse set of benefits in general. So it’s not just the wages, it’s the benefits that employers are having to offer to attract and retain good talent.